Angola: Giant Awaiting Economic Soaring (By Palesa Sekhejane)

Posted: June 6, 2014 in Uncategorized

 

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Although Nigeria’s Per Capita gross domestic product (GDP) is still far below that of South Africa, Nigeria’s recalculated economy of $510 billion as reported, is so far the biggest in Africa, which gives the West African nation continental bragging rights. But how many ordinary Nigerians are enjoying a fair share of the said $510 billion economy? However, Nigeria is not the only country in Africa with abundance of resources but whose majority citizens are living below the bread line.

On that note, allow me to look at a once conflict stricken country – Angola. This country, like Nigeria, is rich in mineral resources, and is said to be one of the promising future economic powerhouse in Africa due to its reported rapid growth. In 2011, the GDP was 3.9% and significantly improved to 7.9% in 2012, with expected 7.8% in 2014 (World Bank).

The 2013 Mo Ibrahim index of African Governance ranked Angola 40th for human development and 36th for sustainable economic opportunity out of 52 countries. However, the quality of health of Angolans since the end of the civil war has been said to have deteriorated due to little or no access to basic resources, a situation that undercuts the country’s potential. Life expectancy at birth is approximately 47 years; under-five child mortality rate is 1 in 5; infant mortality rate is 98 per 1 000 lives; diarrhoea and malaria are endemic due to lack of inadequate access to safe drinking water (World Health Organisation).
The burden of disease shows that 74% accounts for communicable diseases, maternal and perinatal conditions as well as nutritional deficiencies; whilst non-communicable diseases and injuries account for 17% and 9% respectively. For every 100 000 people, there are only 8 to 10 physicians available and 13 nurses per 10 000 people. The health finance per capita in total expenditure is approximately $131 with 2.5% of GDP, which is inadequate to provide sound health system to the citizens. Furthermore, general government, external and private sector expenditure on health is 5.3%, 3.7% and 19.7% respectively (Angola Health System Assessment 2010). Rich citizens travel abroad to seek medical attention while poor citizens have no choice but to utilize the insufficient health provisions. The fact that there are barriers that hinder Angola’s health performance indicates that the economic wealth contributes nothing towards citizen’s prosperity.

I strongly believe Angola has the potential to be the strongest member state in the Southern Africa Development Community (SADC). However, the inability of Angola to transform its economic potential to capital and human development, results in obstructive bearings. This needs to be addressed urgently because firstly, Angola has the potential and capacity to deal with this problem, and secondly, it is imperative for human dignity restoration, bearing in mind the country endured a long and brutal civil war. Like Thomas Sankara once said, “Dare to invent the future”, Angola is in that position to do so.
According to the 2013 Country Strategy Plan (CSP) of the Republic of Angola, the county is heavily dependent on the oil and gas sector; and broad economic and development strategies such as the public expenditure programme have been designed to encourage economic diversification, enhancement of service delivery and improvement of capacity and resilience. However, these efforts are not effectively assisting towards significant poverty reduction, social equity and development of quality life. Therefore, one is compelled to conclude that Angola has the ideal but unrealistic plans.

The SADC charter encourages regional cooperation and collaboration to promote the economic growth and development. Angola trades oil for example, majorly with China and Portugal, and less with regional member states. However, this trade relation with China and Portugal still has not borne desired economic benefits for Angola. Having said this, I believe that this oil rich country should do an inward reflection on this economic relation. The opening up of cooperation and trade with SADC member states would be beneficial not only for regional integration, but also for Angola and its fellow Lusophone countries. This will also enhance and grow the country’s foreign reserves.

Education and health are imperative for Angola in order to reduce poverty, as well as increasing human and economic development. In 2012, Angola had an opportunity to hold the one-year rotational presidency of SADC. During that period, the authorities contributed towards the approval of the preliminary list of regional priority projects and regional infrastructure plan. However, due to lack of cooperation from Angola, the plan failed to materialise. This scenario is evident enough to support the idea that Angola has the capacity and potential of becoming a regional economic giant, only if it increases its responsiveness to regional cooperation efforts and strategies.

Angola and South Africa had frosty relationship in the era of Nelson Mandela and Thabo Mbeki, however, in October 2013, South Africa, under Jacob Zuma, met to discuss and agree on the Joint Commission for Cooperation. The South African Minister of International Relations and Cooperation, Maite Nkoana-Mashabane released a statement regarding the Joint Commission for economic, social and political cooperation between South African and Angola. This bilateral cooperation, according to the Foreign Affairs Minister of Angola, will involve the participation of South Africa in the reconstruction of the Angola’s infrastructure and economic development. It is in this regard that I believe that if the bilateral cooperation is taken seriously, Angola will strongly triumph against the criticism of relying heavily on its gas and oil sector.

The commission may see both countries promoting inclusive regional growth, and optimise the potential of Angola and South Africa to do business by cooperating in areas that will be beneficial to both countries and eventually SADC. This would also ensure that both regional powers within SADC are able to effectively champion regional integration and development in the region.

With South Africa being the only African nation in the G20 and BRICS, and Angola being Africa’s second-biggest oil producer, bilateral relations between these two states will result in economic and political ties soaring up to new heights.
Having said this, it will be interesting to see how the anticipated efforts towards cooperation will strengthen the region and bring about durable changes in Angola. More so, it will be of benefit to Angola to invest in its social development and access to basic services such as education and health through revitalisation programmes and initiatives.

The potential of an efficiently implemented bilateral investment agreement between South Africa and Angola cannot be understated. For Angola, it has the effect of reducing its dependence on oil revenue and also boosts investors’ confidence. This is particularly important considering that the ease of doing business in Angola in 2014 is ranked at 179 out of 189 countries according to World Bank.

Palesa Sekhejane is a Research Specialist in the Sustainable Development Division of the Africa Institute of South Africa. She writes in her personal capacity.

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